Russia wants to maintain its control over the minds of the population of CIS countries.

Belarus develops its own anti-missile system, the Halberd. The Kremlin hopes that its allies will help it with supplying it military equipment that it is...

Russia wants to maintain its control over the minds of the population of CIS countries.

Belarus develops its own anti-missile system, the Halberd. The Kremlin hopes that its allies will help it with supplying it military equipment that it is not longer able to directly access through Ukraine.

The UAV Grif learns to fly. The military and industrial sector is looking to make some more money, while the army has none to speak of. Another arrest in a high-profile corruption case is made in the Homiel region.

Russia seeks to preserve its information influence in the CIS. Moscow wants to retain one of its most important means of leverage over post-Soviet countries, its dominance in information dissemination. Through the Collective Security Treaty Organisation (CSTO), Russia reiterated the importance of a coordinated information policy between the Alliance's members.

This means preserving a single informational network, or to put it more plainly, Russia wants to keep CSTO member states in the fold of Russia's informational sphere of influence.

Moscow still seeks to infuse its anti-Western sentiments throughout the capitals of CSTO member statesRead more

Meanwhile, Moscow still seeks to infuse its anti-Western sentiments throughout the capitals of CSTO member states by scaring local rulers with claims that "attempts to use the technology of 'colour revolutions' are being made" against the Alliance's member states.

A round table on the topic of information, social networks and security took place on 24 July 2014 at the CSTO Secretariat in order to develop this subject. The main objective of the event was to work out recommendations for countering destructive activities in mass media and social networks.

Some proposals, taking into account the implementation of such practises of countries in the post-Soviet space, are of openly repressive in nature (countering information and psychological pressure in the blogosphere and social networks directed against leaders of CSTO member states, permanent monitoring of social networks in order to block the dissemination of negative information in the CSTO).

Belarus plans to develop its own anti-missile defence system. Alexander Lukashenka stated the need to develop a national anti-missile system, which would be "not worse than the C‑300". The Belarusian military and industrial sector certainly has the necessarily technological means to create an air defence system. Yet, the lack of a domestically manufactured rockets and missiles remain problematic.

Due to political restrictions, only three countries, Ukraine, China and Russia, can supply missiles to any future domestic anti-missile system. Belarus already has experience with the short-range anti-missile sT-38 Stiletto system, a project implemented jointly with the Ukrainian military and industrial sector that makes use of a Ukrainian anti-aircraft missile. However, the supply of medium-range missiles will require a political decision.

This may "stimulate" Moscow to transfer its anti-missile defence equipment to Belarus on preferential or pro bono termsRead more

The existence of technological foundation in Belarus for the development of its own anti-missile system may "stimulate" Moscow to transfer its anti-missile defence equipment to Belarus on preferential or pro bono terms.

First of all, such a move would help to Belarus in the sphere of Russian military and technical influence. Second, a change in policy would be guided at "strangling" any potential competitor on the market of air-defence systems. If the national army does not buy the domestic air-defence systems, it would dramatically curtail the export prospects of the new weapons system.

Russia hopes to circumvent the arms embargo imposed by Kyiv with the help of CSTO member states. After Ukraine banned supplying military goods to Russia, Moscow, through the CSTO, is considering ending its military contracts with Ukrainian enterprises to start working with the member states of the Alliance. Russia hopes, with the help of its allies, to organise the manufacturing of components, weapons and military equipment, which it previously purchased from Ukrainian arms industry companies.

It is doubtful that this idea will prove to be successful: the Ukrainian military and industrial sector has a number of critical and unique technologies, the mastery of which would take years to develop — even with access to the necessary technical documentation. Primarily it is an issue of training of skilled manufacturing personnel and procuring the necessary manufacturing equipment.

Tests of the UAV with the 100 km range are near completion. There are plans to complete in the near future a series of tests of an unmanned aircraft-type vehicle Grif-1, manufactured by the 558th Aircraft Repair Plant. Before the end of the year, a decision should be made on whether or not the Belarusian army will adopt the equipment. And in a year, supplying equipment to the Belarusian ministry of defence may find footing and be launched.

It should be noted that in October 2012 we learned that the 558th Aircraft Repair Plant had received a preliminary order from the Belarusian ministry of defence for several dozens of UAVs. The first six units should have been delivered to the ministry before the end of 2013.

The Ministry of Defence and the military and industrial sector debate pricing policy for weapons. On 16 June 2014, a meeting was held in the State Military and Industrial Committee (SMIC) on the issues of the development and mass manufacturing of weapons, military and special equipment, increasing managerial responsibility for the execution of the state defence orders its pricing policy.

Major General Alieh Bielakonieu, Chief of the General Staff of the Armed Forces, representatives of the ministry of defence as well as heads of organisations included in the SMIC attended the meeting.

The participants raised again the issue of financing the development of a national military and industrial sector. The pricing mechanism for military goods remains a problem. Based upon published information, the solution could be lowering manufacturing costs rather than increasing prices. The latter is caused by the limited financial resources of security agencies.

Investigation of a high-profile corruption case in the Homiel region is under way. A number of senior officials from the KGB and local police, a judge and officials were arraigned on criminal charges recently. Apparently, the list thus far is inconclusive. Information about the detention of a deputy head of the police department of the Homiel region was released. His name, however, was not made public was not communicated.

This suggests that the KGB got the go-ahead to carry out a 'cleansing' of the regional elite. Siarhiej Tsierabau, the new head of the Homiel department of the KGB, is a new man in the region and he is not connected in any way with the regional elites. Thus, he has no commitments towards them.

The Tobacco Curse: Why Belarus Smokes and Smuggles Cigarettes

smuggling cigarettes across the border

More than 65% of Belarusian university and high school students smoke, according to recent estimates from the Ministry of Health.

While smoking is declining across Europe, a growing number of young Belarusians are turning to cigarettes due to lax regulations and low prices. Cheap cigarettes from Belarus are also being smuggled into Western Europe, involving thousands of Belarusians who regularly engage in criminal activity.

Why do cigarettes in Belarus remain among the cheapest in Europe?

Raising the cost of tobacco products – by levying an excise tax on consumers – is a simple and effective measure to combat smoking among both youth and adults.

A tobacco tax could produce economic as well as social and health benefits. At the end of the day though, the Belarusian government is reluctant to tax tobacco because of the profits it reaps from manufacturing and exporting tobacco products.

Belarusian Youth are the Biggest Smokers in the post-Soviet Space

Overall rates of smoking in Belarus are comparable to those in other post-Soviet states. But Belarus leads in the prevalence of smoking among young people. This suggests that the state has not done enough to discourage new smokers from joining the legions of the nation's smokers.

According to the World Health Organisation (WHO), raising taxes on tobacco products is one of the most efficient ways of combating tobacco consumption. This measure is especially effective among young people, who tend to have lower incomes and are not yet addicted to nicotine.

WHO estimates that if all countries raised taxes on tobacco by 50% per pack, governments would earn an extra $101 billion in revenue, while decreasing the number of smokers by 49 million.

WHO recommends the tax be equivalent to at least 75% of the retail price. This policy is currently in place in 26 out of 53 countries in the Europe, including those EU countries that border Belarus (Poland, Latvia, Lithuania, and Estonia). Not a single post-Soviet country has raised taxes on tobacco products to this level, however.

Belarus offers perhaps the cheapest cigarettes in the EU neighbourhood. They cost about 13 times less than in other European states. For example, in 2012, the price for a pack of Philip Morris' Marlboro ranged from $1.50 in Belarus to $17.80 in Norway, according to a report by KPMG LLP.

Smugglers Can Earn up to 1000% in Profits

In the last ten years, as the price gap have significantly narrowed between EU countries and as Belarusian prices have remained low, the country has become the largest source of illegal tobacco in the EU.

According to a KPMG study commissioned by major global tobacco companies, Belarus’ total volume of illegal C&C cigarettes exported to the EU was around 6.9 billion cigarettes in 2013. For sake of comparison, Russia accounted for a mere 3 billion illegal C&C cigarettes over the same period of time.

The KPMG study also found that the highest levels of illegal trade incidences are found in Latvia (28.8%), Lithuania (27.1%), Ireland (21.1%), Estonia (18.6%) and Bulgaria (18.2%).

It is no coincidence that three of these five countries border Belarus. Smuggling from countries like Belarus, where a pack of cigarettes costs just over one euro, allows smugglers to earn profit margins of up to 1000%.

The Real Costs of Cheap Tobacco

Poland is another popular destination for illegal tobacco from Belarus. Passengers on a short train ride from Grodno, Belarus to Bialystok, Poland can easily illustrate just how bold some ordinary citizens can become when given sufficient financial incentives.

As soon as the train starts on its way, about two-thirds of “passengers” rush to unscrew parts of the floor, seats, and ceiling to hide their stock of illegal cigarettes. Cigarette packs can also be easily taped to passengers’ bodies. (The law permits two packs per person.)

At the border, customs officials uncover only a small portion of the hidden loot; the rest is taken out in Bialystok and sold. The few unlucky smugglers who are caught red-handed are fined, but the fine is unlikely to deter them from trying again.

The local newspapers frequently publish amusing stories about the ingenuity or the foolishness of tobacco smugglers.

These stories speak of secret compartments, double underwear, and packages with mini-antennae sent floating down the Neman river, which runs along 18 kilometres of the Belarusian-Lithuanian border.

Of course, the volume of cigarettes smuggled by these “desperate” citizens is peanuts when compared to the volumes transported by criminal gangs via more sophisticated methods.

Smuggling cheats governments and tobacco companies out of billions in profits. Aside from financial losses, cigarette smuggling carries social costs that disproportionately fall on communities living close to the EU border. Studies show that illicit trade fosters broader criminality, from stolen property to corruption to murder.

Who Invests in Belarusian Tobacco?

Even though cigarette companies lose some sales through smuggled cigarettes, they can also benefit financially when investing in factories located in countries with low tax rates. These factories are used to produce brand-name products that are then sold abroad. Because of the low tax rates on tobacco products, Belarus has become an important link in the tobacco sales chain.

There are two major manufacturers of cigarettes in Belarus: the “Neman” Tobacco Factory in Grodno and the Belarusian-American joint venture “Tabak-Invest.”

Both factories have attracted big-name international investors. British American Tobacco reportedly invested 20 million Euros in “Neman”, while Japan Tobacco International is manufacturing its cigarettes via “Tabak-Invest”. In April of this year, the British company Tobacco International Enterprises agreed to invest 4.5 million Euros in “Neman” as well.

According to its 2014 budget estimates, the Belarusian Ministry of Finance projected US$400 million in excise tax revenue from tobacco products. Higher tobacco taxes would further raise revenues for many years to come, even if they would decrease the rates of smoking over time.

In some cases where a country has raised tobacco taxes, the price increases have actually increased the prevalence of smuggling cheaper cigarettes into the country, diverting money that would otherwise flow to governments in the form of tax revenues.

In Belarus, however, the situation appears to be rather different, since cigarettes are smuggled out of the country into the neighbouring EU. Raising tobacco taxes are thus likely to reduce rather than increase smuggling – a win-win scenario for government coffers and the healthcare system.